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Europe: Shares near three-week high, with focus on Greek vote

Thursday, July 16, 2015 - 06:34
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[LONDON] European shares steadied at three-week highs on Wednesday, led by Dutch firm ASML, as investors waited for a crucial vote in Greece on a proposed bailout package.

The pan-European FTSEurofirst 300 index was up 0.4 per cent at 1,586.50 points by the close, touching its highest since June 26.

Outperforming other national indexes, Italy's FTSE MIB rose 1.3 per cent and Spain's IBEX gained 0.7 per cent, as bond yields in the euro zone's periphery fell before the Greeks vote.

After reluctantly agreeing to stringent terms for a new bailout deal, Greek Prime Minister Alexis Tsipras now must face down a rebellion in his anti-austerity Syriza party to push sweeping pro-market reforms and spending cuts through parliament. "The terms of a potential deal have been thrashed out ... there's no guarantee it will go through the Greek parliament, and even if it does, there are several more hurdles that remain," said Jeremy Batstone-Carr, a market analyst at Charles Stanley. "Nobody knows which way the cards are going to fall." Investors were reluctant to make strong bets either way, although some analysts said that support from opposition parties meant the Greek parliament was likely to get through parliament.

The top riser on the FTSEurofirst 300 was Dutch lithography machine maker ASML after it forecast a bigger-than-expected rise in 2015 revenue, lifting its shares 4.3 per cent.

Swiss pesticide maker Syngenta rose 4.2 per cent following reports that hedge fund Paulson & Co had taken a stake in the company.

Norwegian non-life insurer Gjensidige rose 3.5 per cent, benefiting from an upgrade from Danske Bank. It is up almost 5 per cent this week after reporting strong quarterly earnings on Tuesday.

Sweden's SKF, the world's largest bearings maker, fell the most, sliding 8.6 percent on its disappointing results and outlook.

British luxury goods maker Burberry was down 2.6 per cent, off its lows, after reporting a slowdown in underlying first-quarter retail revenue growth. It blamed deterioration of the high-margin Hong Kong market. "The underlying performance reads well, but the worry over a sharp fall in activity in Hong Kong and lacklustre growth on the Chinese mainland will worry investors," Will Hedden, dealer at London Capital Group, said in a note.

REUTERS